HSBC has unveiled its biggest bonus pool in 14 years after annual profit beat City expectations, giving bankers a $3.9 billion profit as the group accelerates its strategic overhaul.
The FTSE 100 lender increased total variable remuneration by 10 per cent year-on-year, taking its 2025 bonus pot to its highest level since it paid out $4.2 billion in 2011. The increase came despite a 7.4 per cent fall in annual pre-tax profit to $29.9 billion, a figure that still beat analyst forecasts of $28.9 billion.
Profit was hit by $4.9 billion in one-time charges, including $1.4 billion in statutory provisions and a $2.1 billion impairment charge related to its stake in China’s Bank of Communications.
Chief Executive Georges Elhedery said the bank was benefiting from “strong momentum” and defended the bonus increase as part of efforts to embed a “high-performance culture”.
“It’s a culture where talent and performance are better rewarded,” he said.
Elhedery himself received a salary package of £14.4 million for the year, up from £13.2 million previously.
Since taking the helm, Elhedery has initiated a major restructuring to simplify the bank and cut costs. HSBC now expects to achieve $1.5 billion in savings by the end of June, six months earlier than originally planned.
Headcount fell to 208,720 at the end of last year from 211,304 the previous year, reflecting thousands of job cuts across the group.
The bank is also increasing its focus on Asia, where it generates the majority of its profits. The company recently completed a $13.6 billion transaction to take full control of its Hong Kong-focused subsidiary Hang Seng Bank.
HSBC said it expects to generate $900 million in benefits from Hang Seng by 2028, including $500 million in synergies. Elhedery said any duplication that would arise from the takeover would be managed through redeployments rather than mass layoffs.
Alongside the bonus announcement, HSBC confirmed it would return $7.71 billion to shareholders through a dividend of 45 cents per share. Shares rose 5 percent in early London trading following the results.
The combination of better-than-expected earnings, accelerated cost savings and a renewed focus on its core markets in Asia appears to have reassured investors, even as the bank navigates geopolitical tensions and ongoing restructuring costs.
For employees, the increased bonus pool represents a return to more generous payouts and underlines Elhedery’s determination to reward performance as HSBC looks to increase its competitive advantage.
